Corporate governance and the role of internal audit : the case of Australian public universities

dc.contributor.author

Christopher, Joseph E.R.

dc.contributor.supervisor

Assoc. Prof. Richard Grainger

dc.date.accessioned

2017-01-30T09:47:20Z

dc.date.available

2017-01-30T09:47:20Z

dc.date.created

2013-08-30T06:22:59Z

dc.date.issued

2009

dc.date.submitted

2013-08-30

dc.identifier.uri

http://hdl.handle.net/20.500.11937/220

dc.description.abstract

Over the last two decades a series of spectacular failures in corporate governance has raised concern about good governance of private and public sector organisations. These concerns inevitably extend to the Australian public university sector, a multi billion revenue earner for the Australian economy. This industry sector has undergone significant changes in strategic and operational direction over the past two decades, affected by a series of governmental reforms and other environmental influencing forces which have inevitably raised questions about governance.These questions have been raised against a background where the ‘traditional’ governance paradigm built on the principles of agency theory is being challenged by academics who have proposed a multi theoretical framework as a basis to take into account the impact of a wider set of influencing forces. A related and growing area within this alternative approach is the evolving role of internal audit as an important governance component. It has been broadly described as an important monitoring mechanism that has a significant role to play in the enhancement of governance.This study was concerned with determining what constituted good governance for the Australian public university sector within this alternative approach. In particular, the study sought to determine an operational governance framework for Australian public universities and the role of internal audit in the enhancement of university governance.The study commenced by examining the theoretical foundations of governance. It critically analysed the literature on the current underpinning theory of governance, agency theory, and recognised growing concerns as to its limitations. These limitations arose out of the inability to recognise wider external and internal influencing forces impacting on an organisation. The researcher in the current study developed a multi theoretical approach to overcome the limitations associated with dependence on the agency theory. A general governance framework was developed based on a multi theory approach. This general governance framework was than used as a basis to develop a specific conceptual governance framework for the Australian public university sector.The role of internal audit was also recognised as an important component of governance. A framework of best practice guidelines in relation to the type and range of activities to be undertaken and the relationship it needed to maintain with management, the audit committee and external auditors was established through a literature review.The university conceptual governance model and the theoretical role of internal audit within the Australian university sector were thereafter subjected to a confirmation and/or refinement and final authentication process with three groups of executive and senior university managers through qualitative and quantitative research processes.Overall there are number of significant implications arising from the results of the study. Firstly an appropriate operational governance framework has been developed for Australian public universities which recognise the wider influencing forces impacting on them. This outcome narrows the theoretical – practical gap for university governance and provides a working framework that can be used by university management and internal auditors to ensure all relevant governance mechanisms and processes are in place and operating efficiently to ensure effective governance. The framework is established against a revised governance concept for the university sector built on the understanding obtained through the research process that it has some distinct differences with the private and public sector and is pursuing a hybrid management approach.Secondly, the results indicate that there are a number of university internal audit functions not adhering to theoretical best practice guidelines established for the enhancement of university governance. This was principally due to a lack of mandatory guidelines in the structural and functional arrangements of internal audit functions across the sector. A related recommendation arising from these findings is for the Commonwealth Government to put in place policies to facilitate consistency in the structural and functional arrangements for internal audit functions. This would assist in the maintenance of quality with respect to internal audit functions in the context of public sector university governance.Thirdly, the findings contribute to the research literature in relation to governance and internal audit. In the governance area, the study has challenged the hegemony of agency theory and recognised a case for a multi theoretical approach to governance. While the model based on this multi theoretical approach has been utilised in this study to develop and authenticate a framework of governance for Australian public universities, there are implications for further research to test the model with a wider array of real life organisational settings to narrow the theoretical – practical gap in this general area. The results have also demonstrated different levels of development and implementation of governance processes within universities. These results provide further research opportunities to examine the relationship between the different levels of impact of the wider influencing forces on universities and development and implementation of governance processes. In the internal audit area, the study has assisted in the development of a quality framework to assess the role of internal audit functions. While this framework has been used and tested in this study, there are opportunities for further research to test the framework with different sectors and refine it, as appropriate.In summary, this thesis makes a modest but original contribution to the higher education literature of Australia. The thesis provides insights into the governance of Australian public universities, its governance paradigms and the role of internal audit in enhancing university governance. The thesis builds on a multi theoretical approach to develop, confirm and authenticate an operational governance model for Australian public universities and also determines the role of university internal audit departments in the enhancement of university governance. The study is exploratory in nature as both areas are relatively new research fields within the Australian public university sector. The findings will therefore assist in filling a knowledge gap in the governance of Australian public universities. The study also contributes to the growing level of literature on both university governance and internal audit, and provides further research opportunities in both these areas.

dc.language

en

dc.publisher

Curtin University

dc.title

Corporate governance and the role of internal audit : the case of Australian public universities

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